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Spotlight [ PDF: 100kb | 15 pages ]

Innovation and Efficiency Initiative – Pilot Financing Instruments and Modalities

The Innovation and Efficiency Initiative (IEI) is a central element in ADB's overall Reform Agenda. In August 2005, four additional financing instruments and modalities were introduced as part of IEI. Three of these are being implemented on a pilot basis from September 2005 to August 2008 (IEI: Pilot Financing Instruments and Modalities). These are:

1. Multitranche Financing Facility
2. Non-sovereign Public Sector Financing Facility
3. Refinancing Facility

The paper Introducing the Local Currency Loan Product [ PDF: 243kb | 28 pages ] mainstreams the local currency loan product.

The new financing instruments are intended to provide ADB clients and operational teams with additional alternatives to help finance development in large individual projects and longer-term investment programs arising out of sector road maps. They are not meant to replace ADB's existing instruments. They expand the alternatives available within ADB's portfolio of development finance solutions, while preserving its credit standing.

The instruments will allow ADB improve services to existing and new clients seeking development finance. They are specifically designed to:

• provide a financing plan for a program of investments in an integrated package or series of related projects intended to achieve an overall development outcome
• efficiently mobilize additional financial resources, including domestic savings, and international finance
• minimize currency mismatches at the project and client levels
• reduce transaction costs
• provide refinancing to fundamentally sound projects with high development impact but weak financing plans.

For more information about IEI, read:

• Progress Report on the Innovation and Efficiency Initiative, September 2005-December 2006 [ PDF: 158kb | 16 pages ], March 2007
• Financing Instruments and Modalities: Flexibity in Development Finance [ PDF: 100kb | 15 pages ], Brochure, January 2007
• ADB to Adopt New Financing Approaches to Better Respond to Development Needs, News Release, August 2005

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